That’s the question American physicians are grappling with. The New York Times recently reported on a growing debate within the medical profession as to whether doctors should make treatment decisions in the best interests of their individual patients — or if they should limit care to save money for “society.”

This would represent a seismic shift in standard medical ethics. Traditionally, a doctor’s primary ethical duty is to the patient. Patients literally put their lives in our hands, trusting that their physician will always act as their advocate. But with health care costs currently consuming 18% of the US economy (and an enlarging share of government budgets), some doctors are openly calling for fellow physicians to limit their use of more expensive tests and therapies to save money for “the larger society.”

As Dr. Martin Samuels (chairman of neurology at Brigham and Women’s Hospital in Boston) warned in the Times piece, doctors risk losing patients’ trust if they say, “I’m not going to do what I think is best for you because I think it’s bad for the health care budget in Massachusetts.”

I also discuss how this conflict of interest will worsen under ObamaCare as well as how adapting an idea by UCLA law professor Russell Korobkin may help avoid this problem and protect the doctor-patient relationship.

Do you trust your doctor? Most patients assume their doctor is working in their best medical interests whenever he or she orders a diagnostic test or recommends a particular treatment. Customers might wonder whether an unscrupulous auto mechanic is being truthful when he recommends a brake job or a new transmission. But most patients trust that their doctor isn’t recommending unnecessary surgeries merely to line his pockets.

The vast majority of doctors take their ethical responsibilities very seriously. Prior to ObamaCare, only a relatively few “bad apples” have chosen to compromise their professional ethics for financial gain. However, ObamaCare creates new ethical conflicts for doctors. We’ll examine some common physician conflicts of interest before and after ObamaCare, and discuss how patients can best protect themselves…

Prior to ObamaCare, physicians faced perverse incentives for overtreatment. Physicians might also be tempted to pad their income through inappropriate self-referral or business relationships such as “physician owned distributorships”.

After ObamaCare, physicians will face perverse incentives for undertreatment, especially with “bundled payments” and government “appropriate use criteria”. The new “narrow networks” required by many ObamaCare exchange plans will exacerbate these issues:

To cut costs, many ObamaCare exchange plans also require “narrow networks” of providers, where patients may only receive treatment from a short list of approved hospitals and doctors. President Obama has repeatedly promised, “If you like your doctor, you can keep your doctor,” but many patients are learning the hard way that this isn’t true.

Such “narrow networks” also mean that many doctors will lose long-standing relationships with patients they’ve seen for years. Instead, doctors will be increasingly reliant on the government-run exchanges for new patients. This will create a powerful incentive for physicians to adhere to any treatment guidelines mandated by the government or by government-approved insurance plans.

I also discuss several ways patients can protect themselves from these old and new physician conflicts of interest.

I don’t know anything about Amanda Palmer or her music, but I really enjoyed her TED talk on funding her music through crowdsourcing. “Asking makes you vulnerable.” Indeed.

So much of this resonates so much for me personally — most obviously given that Philosophy in Action Radio is available for free, but supported by contributions from fans. That does give me a great sense of trust and vulnerability… and immense gratitude too.

Is an egalitarian society a better society? The 2009 book “The Spirit Level” by Richard Wilkinson argues that income inequality has a broad range of negative effects on society. According to the summary on Wikipedia, “It claims that for each of eleven different health and social problems: physical health, mental health, drug abuse, education, imprisonment, obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being, outcomes are significantly worse in more unequal rich countries.” Are these egalitarian arguments wrong? If so, what’s the best approach to refuting them?

These arguments are more philosophically interesting than I expected, as they’re basically an empirical version of Rawlsian egalitarianism. The statistics are also more compelling than I imagined at the outset: apparently, even wealthy people are better off in societies with less disparity between incomes.

When St. Louis businessman Michael Munie decided to expand his moving business to operate throughout the state of Missouri, he thought it would be a simple matter of paperwork. After all, he already held a federal license allowing him to move goods across state lines. But when he filed his application, he discovered that, under a 70-year-old state law, officials in Missouri’s Department of Transportation were required to notify all of the state’s existing moving companies and allow them the opportunity to object to his application. When four of them did file objections, department officials offered Munie the choice of withdrawing his application or appearing at a public hearing where he would be required to prove that there was a “public need” for his moving business. The law is not clear on how exactly he would do this — “public need” is not defined, nor are there any rules of evidence or procedure in the statute. And even if he managed to prove a “public need,” the department would take anywhere from six months to a year to make a final decision. In the face of such complications, Munie chose to withdraw his application and ask instead for limited permission to operate within a portion of St. Louis. His competitors had no objection to that, and he was given the restricted license.

Bizarre as this law might seem, it is only one of dozens of such requirements, generally called “certificate of necessity” (CON) laws, that exist across the country, governing a variety of industries, from moving companies and taxicabs to hospitals and car lots. A legacy of the early 20th century, CON laws restrict economic opportunity and raise costs for products and services that consumers need. Unlike traditional occupational licensing rules, they are not intended to protect the public by requiring business owners to demonstrate professional expertise or education. Instead, these laws are explicitly designed to restrict competition and boost the prices that established companies can charge.

She adds much-needed conceptual clarity in the discussion over health policy by discussing the nature of genuine insurance, as opposed to our current system. From her piece:

What is insurance? Think about your auto, life and homeowner’s insurance. Each of these is designed as a means to pay for unexpected, unpredictable, very expensive occurrences outside of the control of the policyholder. Insurance is a means of financially protecting people from the risk of unlikely but high-cost events. To build up sufficient funds, the insured pays a premium calculated on their specific chance of experiencing a covered event. Insurance companies can only stay solvent if what they take in as premiums is greater than what they pay out in claims (plus business expenses and a competitive profit).

So what is it we have that we call health insurance but isn’t? We have the prepayment of medical expenses. We expect our “insurance” to cover predictable, relatively inexpensive events like health maintenance checks, minor illnesses and injuries — and to pay for them with minimal out of pocket spending. Under Obamacare, these expectations will be mandated by law. The new law actually makes it illegal for insurance companies to charge individuals premiums equal to their risk of making claims. It’s like having a law requiring homeowner’s insurance to pay for lawn care, house painting and water heater replacement, while at the same time prohibiting the companies from operating an actuarially sound business.

Instead of genuine insurance, we are moving towards a system of bad pre-paid care.

And by the way, under Dr. Haynes’ leadership, the Benjamin Rush Society has been sponsoring an excellent series of debates on important health policy issues. Go check out their website for details and videos!

The Federal Reserve has taken control of the future by dictating interest rates. The capital budgeting decision essentially depends on an interest rate tied to reality, an interest rate that connects actual savings to loanable funds. The now vs. later decision involves a discounting of future cash flows using an interest rate that functions as a reference. Whether it makes sense to build a factory or not depends ultimately on the specific interest rate at which capital can be borrowed. But since the Fed arbitrarily sets interest rates, that means business owners have been denied the basis on which to plan. Moreover, since the practice of driving interest rates below the natural rate has the consequence of generating the boom/bust cycle, an added level of uncertainty is added that not even the Fed can predict.

A restoration of the gold standard and naturally determined interest rates is required to make long range planning possible.

That’s an excellent example, unfortunately. (FYI: I’ve not read the article in question, and I don’t have the technical background in economics to judge it.)

On a related topic: Objectivists and other free-market advocates often talk of the need to return to a gold standard. That seems wrong to me. Yes, our current system of fiat currency should be replaced by hard currency. (By “hard currency,” I mean commodity-backed currency, not merely stable currency.) However, that need not entail the gold standard.

In a truly free market, the government might choose to accept only gold-backed currency, but that choice shouldn’t be imposed on anyone else. Banks might choose to issue silver-backed or platinum-backed currency. Heck, a bank in a free market could issue currency backed by any fungible good, from crude oil to large eggs. The best option, it seems to me, would be money issued by banks backed by a “basket of commodities.” That would help stabilize prices in cases of major changes in the supply or demand of a single commodity.

So, for those of you who advocate for the gold standard: What do you mean by that? Do you mean that the government would issue legal tender backed only by gold? If so, how is that consistent with free market banking? If not, then why advocate for a “gold standard” rather than hard currency?

I’m not being snotty here. I’m not any kind of expert in economics, and I want to know if I’m missing something!

In this piece, I discuss the importance of making a moral defense of those who have earned wealth honestly, not just an economic defense.

Here is the opening:

Suppose a young medical researcher, Dr. Smith, discovered a safe, reliable vaccine for breast cancer. If a woman took a single pill at age 30, she’d never develop breast cancer. But the pill costs $1,000. How many American women would take that deal?

Most women would likely jump at the opportunity. For $1,000, a woman would be forever spared the expense and inconvenience of future annual mammograms. She’d never have to worry about her doctor calling to say, “Your mammogram showed a suspicious spot; please come in for a biopsy.” The 12% of women who would have developed breast cancer during their lifetimes would be spared the pain and risks of surgery, chemotherapy, and radiation therapy.

Each woman would gain an enormous value in terms of money saved, peace of mind, and potential added years of life, far exceeding the $1,000 cost. Roughly 2 million American women turn 30 each year. Assuming Dr. Smith made a 10% profit from each sale, he would earn $200 million a year. Most people would regard that as a completely fair outcome.

I’m also delighted to announce that Forbes has invited me to be a regular contributor, after my prior guest OpEds. My focus will be primarily on health care, economics, and related issues, from a free-market perspective.

The theme is that America needs market-based health reforms such as Health Savings Accounts which reduce costs while preserving quality medical care, not government-mandated “bundled payments” which will harm patients and literally set a price on human life.

Here is the opening:

What simple health care reform has reduced medical costs by up to 30%, while preserving quality of care? Hint: It’s not government price controls or mandatory health insurance. Rather, it’s letting patients decide how to spend their own health care dollars…

It’s not directly related to health care policy, but rather the broader theme of defending the virtue of the profit motive in a free, capitalistic society. (I do use insurance as an example of how value is created). Here is the opening:

“Profit” is a dirty word. Profit-seeking businessmen are stock villains in Hollywood movies. “Occupy Wall Street” protestors demand, “People not profits” (whatever that means). Companies reporting healthy profits are automatically assumed to be exploiting customers and can only atone for this by “giving back” to their communities. “Making a profit” has an unsavory, morally suspect taint.

Yet simultaneously, Americans have a far more positive view of the concept of “creating value.” The mainstream press lauds visionary businessmen who “create value,” such as the late Steve Jobs of Apple. The business literature routinely emphasizes the importance of “creating value.” So many organizations wish to be seen as “creating value” that it has become a business cliche, like “best practices” and “thinking outside the box.”

But in a free society, “creating value” and “making a profit” are just two sides of the same coin…